Pharma policy GoM to decide on price control

Tuesday's meeting to examine the pricing policy prepared by ministry of chemicals & fertilisers

On Tuesday, a group of ministers (GoM) led by agriculture minister Sharad Pawar will examine the proposed National Pharmaceutical Pricing Policy (NPPP) prepared by the ministry of chemicals and fertilisers.

The key issue is to vet the various price control mechanisms suggested by the ministry and other stakeholders. The group will decide whether the policy should be market-based or a system of exact cost plus profit for medicine price fixing. The extent of price control, whether restricted to the specific strengths of drugs mentioned in the National List of Essential Medicines (NLEM) or on all strengths and combinations of NLEM, will be decided.

The meeting is the first sitting of the GoM constituted for the purpose in September 2009. Intense efforts by industry and civil society interest groups to tweak the policy in their favour may now continue at the GoM level. Industry stakeholders said Pawar would meet drug trade representatives to hear their views ahead of the meeting.

NPPP 2011, the basic drug price control plan formulated by the ministry of chemicals and fertilisers, was uploaded on the ministry website for stakeholder views several months earlier. Of over two dozen suggestions, the ministry is to indicate its preferences at the GoM. The latter’s decision will then require Cabinet approval and a final nod of the Supreme Court before the policy can be put in force.

NPPP had suggested a price cap for essential drugs on the basis of the average price of top-selling brands. While industry was not averse, civil society groups had been demanding the average of lowest priced drugs as the ceiling. The authorities may now look for a middle path.

Ghulam Nabi Azad, minister of health and family welfare; Kapil Sibal, minister of human resource development and communications & information technology; Anand Sharma, minister of commerce and industry; M K Alagiri, minister of chemicals and fertilisers; Salman Khurshid, minister of law and justice and Montek Singh Ahluwalia, deputy chairman, Planning Commission, are the other GoM members.

The previous GoM on pharma, set up in January 2007, was also headed by Pawar. It held four meetings through 2007 and 2008 but could not make any recommendations. The last meeting was in April 2008. Although the next meeting of the GoM was expected to finalise the policy, it never happened.

The delay in the announcement of a policy had led public interest groups petitioning the Supreme Court. Preparation of NPPP and the proposed GoM meeting are fallouts of the judicial intervention.